Seoul unplugs U.S. cash

South Korea, reacting to local companies’ pressure to keep licenses for cable TV in the family, has pulled the plug on plans to attract investment from U.S. and other foreign cable operators.

The government is expected to make a decision on the number of systems and frequencies later this year.

Move follows speculation in the local press that Korea was planning to open the cable sector — still virgin soil even for local companies — to the United States.

The Clinton administration was expected to push Seoul to open its markets further, but South Korea has given a resounding “no.”

U.S. officials in the embassy in Seoul have been hoping Korea would allow investment from U.S. cable operators, in what is regarded as a potentially very lucrative market.

The U.S., say American Embassy sources in Seoul who asked not to be identified, asked at “informal trade talks” in Washington in January that Korea open its cable sector to foreign competition.

Bowing to pressure from Korea’s huge conglomerates, which are competing to win cable TV licenses, the Economic Planning Board announced there were no plans to allow foreign participation.

“This is disappointing, but not unexpected,” said one of the embassy sources. “The major conglomerates are doing all they can to elbow foreigners out.”

With only three TV stations, two state-run and the other “quasi-private,” cable operators are expected to reap huge profits, say TV industry sources. More than 90% of households have at least one set and TV is easily the most effective advertising medium in Korea.

“Advertisers are still crying out for space,” said one foreign ad exec in Seoul.

The U.S. is expected to continue to press Korea to open up the cable sector. Seoul, with two pilot cable systems in operation, has not yet fully worked out its formula for running cable TV.

Broadcasting authorities, always concerned over the level and content of foreign programming in Korea, are said to be suspicious of allowing foreign ownership.

While the conglomerates fight among themselves to secure the cable licenses, another war is going on to operate a fourth channel. This new channel, which has been made possible through plans to convert Seoul’s Armed Forces Korea Network station to UHF, will probably launch by July.

Although the government has no plans to license a new broadcaster on the existing armed forces channel, said the official at the Information Ministry, powerful groups are lobbying government officials to set up another TV station.

In Korea, where government policy changes almost overnight, most analysts believe that the broadcasting authorities will eventually approve another channel.

The key contenders, say industry sources, are the Christian Broadcasting System, the Buddhist Broadcasting System and the Samsung group, Korea’s second-largest conglomerate.

The two religious broadcasting systems are operating radio stations. Samsung owned a broadcasting corporation that was forcibly merged with state-run KBS in 1980 by former prez Chun Doo-hwan.